COMPETITION • FRENCH LAW • PROCEDURE

In order to increase the effectiveness of the supervision, the legislator has, following the example of American and European law, instituted a system of leniency allowing the degree of cooperation of the undertaking to be taken into account in the assessment of the amount of the fine (Commercial Code, Art. L. 464-2). In application of section IV of Article L. 464-2, a total or partial exemption, if necessary subject to conditions, may be granted to an undertaking or organization that has helped to establish the existence of prohibited practices under competition law and to identify their perpetrators.  In its procedural notice, the Competition Authority distinguishes between two scenarios: cases where the Authority does not have any information and cases where it already has information. In the first case (type 1 A immunity), conditional immunity is granted to the first undertaking that provides evidence not previously available to the Authority and which is sufficient to establish the suspected infringement and start investigative measures.  In the second case (type 1 B immunity), conditional exemption is granted if three conditions are met: the undertaking must be the first to provide sufficient information to establish the alleged offense; the Competition Authority must not at the time of the leniency application already dispose of sufficient evidence; no undertaking has obtained a conditional leniency opinion (avis conditionnel) from the Authority. Undertakings that do not meet those conditions may still obtain a partial exemption from fines (type 2 immunity) if they can provide evidence with significant added value relative to the evidence the Authority already has. The degree of exemption depends on the ranking of the undertaking’s application, the time the application is made, and the degree of significant added value that the evidence brings.

In order to increase transparency and encourage businesses to make type 2 applications, the Procedural Notice of 3 April 2015 now fixes ranges of predetermined fine reductions. Thus, the first applicant to provide information of significant added value to the Authority may be entitled to a reduction of between 25 and 50 %, the second between 15 and 40% and, for the last to provide information, 25% maximum. Similarly, in order to ensure that undertakings wishing to cooperate have equal access to the leniency program, the notice provides for the publication of a press release to announce the triggering of search and seizure operations, which will not, however, disclose the names of the undertakings concerned in order to safeguard the presumption of innocence. Businesses may also make a summary application (in addition to an application to the Commission if they consider it to be the best placed to handle the case) for any type of application for leniency regardless of their rank in the order of applications.

In addition to the conditions of eligibility for type 1 A, 1 B or type 2 immunity, the total or partial exemption from financial penalties is subject to compliance by the undertakings, regardless of their rank, with a number of cumulative conditions. The undertaking must first put an end to its involvement in the alleged cartel at the latest from the date of notification of the leniency opinion (avis de clémence) by the Authority. It must also cooperate genuinely, fully, on a continuous basis and expeditiously from the time it submits its application to the Authority and throughout the investigation and review procedure. Such cooperation includes: providing the Authority with all information and evidence on the alleged agreement that may come into the applicant’s possession or which are available to it; not disputing throughout the procedure the facts revealed to the Authority which form the basis of the leniency opinion, the substance of the facts or the very existence of the practices denounced; remaining at the Authority’s disposal to promptly respond to any request aimed at contributing to the establishment of the facts at issue; making available for interview current and – insofar as is possible – former employees and legal representatives; abstaining from destroying, falsifying or concealing relevant information or evidence relating to the alleged agreement; and abstaining from disclosing the existence or the content of its leniency application before the Authority has issued the Statement of Objections to the parties unless the latter gives its consent.  When contemplating making an application for leniency, the undertaking must not have destroyed or falsified evidence of the alleged agreement or disclosed its intention to apply for leniency or the content of the application, except to other competition authorities. Lastly, full immunity from fines cannot be granted to an undertaking which coerced others to participate in the infringement.

The procedural rules regarding leniency are governed by Articles L. 464-2, IV and R. 464-5 of the Commercial Code. The undertaking must apply to the rapporteur général by registered letter with acknowledgment of receipt. It may also apply orally in which case the date and the time of the declaration will be recorded in writing by the rapporteur. Leniency applications are ranked on a first-come-first-served basis according to the date of receipt of the registered letter or the establishing of the minutes by the rapporteur général. This ranking is of utmost importance as only the first undertaking to denounce the anticompetitive agreement can benefit from immunity from fines. The rapporteur général fixes a deadline (leniency marker) during which time the order of arrival of applications is maintained to allow the undertaking to gather together all information and evidence necessary for the review of the application by the Authority. The date of provision of that information and evidence within the marker period is regarded as being the date of receipt of the application. The disclosure of new evidence after the marker period does not affect the applicant’s place in the queue provided that the new evidence does not constitute a key element of the information disclosed by the undertaking and that it is submitted before the issue of the opinion on leniency. Once the application has been registered, the rapporteur général draws up minutes (a “procès-verbal“) of the undertaking’s oral or written declaration. The rapporteur appointed to investigate the leniency application writes a report on the basis of the information disclosed and where appropriate makes an offer of leniency, informing the applicant as soon as possible whether the application constitutes a type 1 A case or not. The report is sent to the applicant and to the Government Commissioner (“Commissaire du Gouvernement“) three weeks prior to the session during which the undertaking will have the opportunity to present its observations. The Authority will then issue an opinion in which it states whether it will grant total or partial exoneration and in the latter case specifies the level of exoneration and the conditions to which it is subject. If those conditions are met, the Authority will grant either total or partial exoneration on examination of the merits of the case. Where the undertaking fails to meet the conditions set, the Authority issues an unfavorable response and returns the evidence provided to the applicant undertaking on request.

Since the Macron law of 6 August 2015, the immunity or reduction from fines can be granted, after the Government Commissioner and the undertaking concerned have been heard, without first drawing up a report.

Finally, the Competition Authority has established the combination of a settlement procedure and a leniency program. However, the joint application of the two procedures cannot lead to an addition of the reduction rates, but only to the successive application of them.